Monday, April 10, 2017

Causation failure dooms Lanham Act claim in bioengineered corn case

Plaintiffs asserted various claims against Syngenta relating
to Syngenta’s commercialization of the corn seed products Viptera and Duracade,
containing a genetic trait known as MIR 162, when China, a key export market,
didn’t approve that corn. Plaintiffs alleged that Syngenta’s acts caused corn
containing MIR 162 to be commingled throughout the corn supply in the United
States; that China therefore rejected imports of all corn from the US, causing
corn prices to drop; and that plaintiffs (who didn’t use Syngenta corn) were
harmed by that market effect. The court previously certified a nationwide
Lanham Act class and state-wide classes for claims under the law of Arkansas,
Illinois, Iowa, Kansas, Missouri, Nebraska, Ohio, and South Dakota. Here,
Syngenta got rid of all Lanham Act claims, as well as any claim of negligence
in which liability was based on any alleged misrepresentation, a voluntary
undertaking, a failure to warn, or a duty to recall. The negligence analysis contains a lot that
seems quite interesting, but I’ll focus on the Lanham Act claims.

An August 17, 2011, letter to all Syngenta purchasers stated
that Syngenta expected import approval from China for Viptera in late March
2012. The court found that plaintiffs
couldn’t prove injury causation. To show causation, they’d have to show both
that farmers read and were influenced by the letter and that the impact of the
letter was great enough to cause the embargo that allegedly caused the price
drop in this country. Of the more than 100 farmers deposed in this MDL and the
related Minnesota litigation, only one testified that he had seen the letter,
and none testified that he purchased Viptera or Duracade because of that
letter. There was no other survey or expert evidence. By the time of the letter, Syngenta had been
selling Viptera for many months and planting for the 2011 season had been
completed. “[T]here was already more than enough corn containing MIR 162 in the
system to cause the alleged trade disruption.”
This justified summary judgment for Syngenta on the Lanham Act claims.

Syngenta also won summary judgment on the negligence claims
to the extent they were based on alleged misrepresentations made in Syngenta’s
deregulation petition or in the course of a lawsuit suit against another market
participant. Plaintiffs argued that they
weren’t asserting any negligent misrepresentation claims, but that the alleged
misrepresentations were part of the totality of Syngenta’s conduct regarding
the commercialization of Viptera that was allegedly unreasonable; the
applicable standard of care allegedly included transparency in communications. The court disagreed. “The law sets forth certain requirements for
liability based on negligence with respect to representations, and plaintiffs
may not circumvent those requirements by basing an ordinary negligence claim on
alleged misrepresentations,” even when additional negligent conduct was also
alleged. However, failure to warn might
be part of the negligence claim.

Among the other rulings on negligence, the court rejected
Syngenta’s attempt to compare the fault of the Chinese government in causing
plaintiffs’ harm, which creates interesting questions about judging foreign
governments’ conduct in domestic disputes.

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